FRI. SEP. 25- Holding Tight

One very hot day (like 100 degree plus hot) many years ago, I was out mowing the lawn because it absolutely needed to get done. While I was outside, I had a couple friends call and leave me messages telling me that they were going to a nearby restaurant in about an hour in nicely inviting me out. This was the pre-cell phone era thus I did not know they called until I saw my machine blinking. And of course by the time I got the messages, they’d already started dinner. I cursed myself and settled in for the evening as I caught up on some other busy work at home. Well, the next day, I called one of the people to ask her how dinner went. She said she was still nauseated; apparently, everybody who went got sick from whatever they ate. Now, the reason I am sharing that parable is that I had an epiphany that day- something I have shared with many people who know me- it is better to be a zero than a loser. In the aforementioned story, I was even- I did not go out and eat, but by missing out on something seemingly good, I instead saved myself from something bad. It is the same thing in the trading world. I’d much rather do nothing than scalp and lose money. I discuss all of this for one main reason: as the overall volumes have slowed recently, much of the action occurs by 10:15AM ET and before and after hours. Certainly this is not true on all days; but it has been so often the case in the last few weeks. I traded just shy of 80,000 shares (way below my average) Monday. Of that, just 12,000 were traded between 10:15AM and the close. I earned about 7% of my day’s income during that time; the other 93% came before 10:15AM and after the 4PM close. Daily epiphany: when there is nothing to do, do not do it. More specifically- particularly as we are still hanging on to the last vestiges of summertime- the middle of the day can be a barren time to trade; if we are in the midst of one of those days whereby the S&P 500 trades in a range of three handles over the course of a three hour period, why push buttons unnecessarily? Oh, and by the way, if you don't do what you're supposed to do early in preparing much less doing trades when there is action early on, odds are you'll fall into the 11:15-2:15 desperation trap in the slow periods scrambling to earn a living as you find your trading results lacking after missing out on the morning opportunities.

Markets overnight were down in Asia- marginally in Hong Kong, but almost 3% in Tokyo on news of worries about the health of Japan Air and a strengthening yen (exports were down 36% year-on-year in Japan). In Europe, prices are weak as well although not huge- about 1/3% on average with prices weakest in Frankfurt (down 3/4%) and strong in London (up 1/4% percent).
Commodities are getting slammed with oil and gold down about 1%. The dolalr is getting hit as well with the currency breaching the 90 yen level overnight. For today, look for much more weakness. RIMM's earnings were bad as was the durable goods data. It will likely be slow and ploddy with illiquidity at that. Furthermore, many participants will not be around Monday for the Yom Kippur holiday so this could exxacerbate selling pressure later. Don't look for anything overly exaggerated, but certainly be aware that there could be a move today.


Watch list:
09252009Eriklist.zip

Reiterating-

Please understand that if the ideas do not get to the hoped for set-ups cited below, more often than not, one should not blindly trade the symbol next to said idea.
If the whole story is not there -

If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified.If something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-

Good- The following stocks have good news and/or a strong technical pattern

TRA- paying out special $7.50 dividend

TIBX- good earnings

AONE- closed just off of a high in becoming the best performing first-day IPO of the year

VITC- in another strong IPO debut, closed near its high

ART- closed near a high on its first day of trading

CPHD- received FDA clearance for Xpert HemosIL FII & FV test

AM- closed near a high after posting great earnings

AMR, UAUA- UBS upgraded entire airline sector; ALK, CAL, LCC likely go with their bigger cousins

AVCA- closed near a high

HOGS- closed near a high

ALTH- received accelerated FDA approval for its Folotyn drug for lymphoma treatment

SEM- pricing 30 million shares at 10 in an IPO

GAME- spin-off of SNDA; pricing 83.5 million shares at 12.50 in an IPO







Bad-The following stocks have bad news and/or a weak technical pattern

RIMM- terrible earnings; AAPL, MRVL, JBL may move in sympathy

AUXL- filed for two million share offering

FINL- poor earnings

ARI- closed on its low in its first day of trading, 1 ½ below offering price in what was an extremely weak performance

HPQ- issued in-line 2010 earnings guidance, but slightly light on revenue guidance

MHP, MCO- closed near lows on concerns about their credit ratings agencies

KBH- poor earnings





Earnings:

FRI SEP 25 BEFORE

FINL KBH



Good luck today.

Epiphany Trading, LLC

www.epiphanytrading.com

Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner